The main lawsuit against Foundations Health Solutions was a federal False Claims Act case that the Ohio-based nursing home operator resolved in July 2017 by agreeing to pay approximately $19.5 million. The settlement covered allegations that the company, two affiliated businesses, and two executives billed Medicare for medically unnecessary therapy, improperly billed for hospice services, and paid kickbacks for patient referrals. The company did not admit liability. Since then, Foundations has also faced a wage-and-hour collective action and a wrongful death case that reached the Ohio Supreme Court.
The $19.5 Million False Claims Act Settlement
On July 17, 2017, the U.S. Department of Justice announced the settlement with Foundations Health Solutions, Olympia Therapy Inc., Tridia Hospice Care Inc., and executives Brian Colleran and Daniel Parker. The agreement resolved three distinct sets of allegations, all tied to Medicare billing practices at facilities the defendants operated or served. The settlement included no determination of liability.
Unnecessary Rehabilitation Therapy
The government alleged that from January 2008 through December 2012, Olympia Therapy and Provider Services (later renamed Foundations Health Solutions) submitted Medicare claims for medically unnecessary rehabilitation therapy at 18 skilled nursing facilities. According to the Justice Department, therapy was delivered at inflated levels to push patients into higher Medicare reimbursement categories. A whistleblower complaint filed by physical therapist assistant Vladimir Trakhter alleged that forced therapy sessions had injured patients who could not physically tolerate the treatments.
Improper Hospice Billing
Between April 2011 and December 2013, Tridia Hospice Care billed Medicare for hospice services provided to patients who were not eligible for the Medicare hospice benefit, according to the government. The Justice Department said Tridia failed to conduct required medical examinations or proper certifications before enrolling patients.
Kickbacks for Referrals
The government also alleged that from January 2008 through December 2012, Colleran and Parker solicited and received kickbacks in exchange for referring patients from the skilled nursing facilities they managed to Amber Home Care LLC, a home health services provider.
The Whistleblowers and Their Awards
Two qui tam suits drove the case. Trakhter filed the first in the Southern District of Ohio in 2011, focused on the therapy billing. Former Tridia employees Paula Bourne and La’Tasha Goodwin filed the second, captioned against Colleran directly, over the hospice claims.
Trakhter received approximately $2.9 million from the settlement. Bourne and Goodwin collectively received about $740,000. Whistleblower awards exceeded $3.6 million in total.
The Corporate Integrity Agreement
Foundations Health Solutions and Brian Colleran also entered a five-year Corporate Integrity Agreement with the Office of Inspector General at the U.S. Department of Health and Human Services. Effective July 13, 2017, the CIA required enhanced oversight covering both claims review and arrangement review. The portion of the settlement tied to the CIA was $16,423,674. The agreement remained in place until it was closed on February 3, 2023.
Wage and Hour Collective Action
In 2022, former employee Helen Durbin sued Foundations Health Solutions in the Northern District of Ohio, alleging violations of the Fair Labor Standards Act and Ohio wage laws for failing to pay non-exempt employees for all hours worked. The suit sought collective action status on behalf of licensed practical nurses, registered nurses, therapists, therapist assistants, phlebotomists, and aides at the company’s facilities.
The court denied conditional certification of the collective, but a magistrate judge later granted expedited discovery in September 2023 to help identify potential plaintiffs. The case terminated on July 22, 2024, following approval of a settlement. The specific terms were not publicly detailed.
Wrongful Death Case at the Ohio Supreme Court
Foundations Health Solutions was a defendant in Smith v. Mentor Ridge Health and Rehabilitation, a wrongful death case involving a deceased nursing home resident. The executor of the estate tried to pursue claims after the original complaint had been filed in the resident’s own name six weeks after her death. The trial court and the Eighth District Court of Appeals both ruled that the complaint was a legal nullity because it was filed in the name of someone already deceased, and that the claims were time-barred because a corrected complaint was not filed before the statute of limitations ran out. On April 16, 2024, the Ohio Supreme Court declined to accept jurisdiction, leaving the lower court rulings in place.
Continuing Regulatory Penalties
Outside of civil litigation, the company has accumulated smaller enforcement penalties across its facilities. According to violation data compiled by Good Jobs First, Foundations Health Solutions has incurred roughly $581,000 in nursing home violation penalties across 45 CMS enforcement actions since 2000. Recent fines include $28,030 against Canterbury Villa of Alliance in 2025, $30,715 against Veranda Gardens and Assisted Living in 2024, and $29,133 against Emerald Pointe Health and Rehab Center in 2022.
OSHA has also cited the company for four workplace safety violations between 2022 and 2024, totaling approximately $66,500. The largest single OSHA fine, $34,848, was assessed in 2024.